Trucker Path, a three-year-old, Mountain View-based platform that helps connect drivers, brokers, shippers, and carriers, has just lined up $30 million in debt funding so it can start loaning some of those truckers money right after they deliver their freight.
It’s seemingly a win-win. It means truckers needn’t wait 30 to 60 days to get paid by the vendors who hire them. In the meantime, the loans are a new revenue opportunity for Trucker Path, which is charging its customers slightly more in interest than it’s paying its two debt providers: Silicon Valley Bank and Flexible Funding, a lower-flying, 25-year-old lending institution in San Francisco.
It’s the latest twist in the war to win over the hearts of the 1.6 million long-haul truckers in the U.S., a somewhat stunning 550,000 of whom are already using Trucker Path’s app, according to cofounder and CEO Ivan Tsybaev.
Why do they use it? Well, partly to communicate to their peers where parking is, and isn’t available. In fact, it’s one of the stickiest features of the app, which began as a navigational tool but now features everything from crowdsourcing to the ability to track shipments from dispatch to delivery.
While people outside the industry might not grasp what a pain in the butt it is to park a truck, a survey by the Department of Transportation has shown that 75 percent of drivers say they regularly have trouble finding a safe place to park when they need to rest. Using Trucker Path, drivers save 11 hours, or $600, each month, insists Tsyvaev. Meanwhile, you can imagine the savings for enterprise customers like Pepsi and FedEx that send out thousands of trucks every day.
Trucker Path isn’t their only option, of course. You’ve probably read about the growing spate of startups looking to elbow aside traditional trucking companies, including Turvo, which we wrote about here, and Uber Freight — a freight broker that’s eventually expected, like Trucker Path, to offer a single platform where brokers, shippers, and carriers can work together in real time.
But Tsyvaev says his company already has the kind of network effect that can mean the difference between barely surviving and thriving, and investors apparently buy his argument. The 30-person company — which has already raised $21.5 million from Renren and Wicklow Capital of Chicago, among others — says it’s right now talking with investors about a Series B round and that it’s already fielding term sheets.
The new funding should help on a number of fronts. One new feature the company has been working on is an insurance marketplace for its trucking customers; they’ll gain access to numerous providers that would otherwise have trouble connecting with these individuals but can reach them more easily with Trucker Path’s help.
Trucker Path also says it wants to beef up its enterprise sales force, and to create a fully automated marketplace, so truckers don’t have to worry about negotiating with shippers or freight brokers. Indeed, ultimately, says Tsyvaev, a trucker will be able to tell Trucker Path’s app how long they’ll be on the road, and it’ll will immediately provide him or her with the “right freight at the right price.”
Then, thanks to its new debt facility, it can give that person a cash advance. Its new equity funding will also come in handy on that front, too. As Tsyvaev explains it, the company’s debt lenders provide only a partial advance rate, meaning that for every invoice, they pay 92 percent and Trucker Path covers 8 percent.
“To scale into a multi-billion dollar business,” says Tsyvaev, and it means to, “we definitely need more capital.”